Tag Archives: chelsea krost

Last month I was invited by Millennial thought leader, television and radio talk-show host, Chelsea Krost to participate in her weekly Twitter Chat, #MillennialTalk. She invited me to share my thoughts on what Millennials need to consider as they work towards buying their first home. What a fun event. We had a very active and engaged audience who asked several great questions. Buying the first home is overwhelming. I hope my responses helped alleviate some anxiety and support the confidence of first time home buyers.

I’ve included the scripted Q&A transcript below from the chat session that took place on July 12, 2016 on Tweet Chat. I blew up my Facebook page that afternoon not realizing I had connected my Twitter feed. I got several texts from friends saying “Do you realize you made 1M + posts on Facebook?!” He he…sorry guys! I will be sure to disconnect Twitter from Facebook for the next #MillennialTalk event.

Enjoy and I hope you find the questions and responses informative! Please tweet me additional questions @ericdunstan. Tweet questions to Chelsea as well @ChelseaKrost if you’d like. She’s just great.

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Transcript from #MillennialTalk with Eric Dunstan on July 12, 2016

Q1 @EricDunstan I don’t want to settle down…why would I buy a home? #MillennialTalk

A1a. There are many benefits to owning a home vs #renting. #MillennialTalk

A1b. Sometimes owning a home can be cheaper and more beneficial than renting. #MillennialTalk

A1c. Having your own house means you can do what you want #MillennialTalk

A1d. Loan programs make it easier to buy a home #MillennialTalk

A1e. Depending on home, monthly maintenance can be limited…giving you free time #MillennialTalk

A1f. Each month your payment builds #equity in the home…giving you power to sell and buy a bigger home #MillennialTalk

A1g It also allows you to borrow against the equity to remodel (called a home equity line of credit) #MillennialTalk

A1h. There are many tax benefits in owning your own on. Talk to a financial advisor or CPA #MillennialTalk

Q2. @EricDunstan OK…what do I need to do to even consider buying a home? #MillennialTalk
A2a. Meet w/advisor & build #financial plan – there are several online services that help w/ this including LearnVest.com #Millennialtalk

A2b. Very important to understand money needed 2 buy a home & how long it will take 2 save enough money to make #downpayment #MillennialTalk

A2c. Think about your 5 yr plan for career, savings etc. If you plan to live in the area for 5+ years it makes sense to buy. #MillennialTalk

A2d #Realestate follows a 5-7 year cycle. If not, consider renting to avoid being caught in a downturn. #MillennialTalk

A2e. Think through life style…what area to live fits your style? Can you afford that area? #MillennialTalk

A2f Sometimes 1st time homebuyers need to break into market in area that may not be perfect fit, #MillennialTalk

A2g They can eventually upgrade to target neighborhood once their current home #equity increases. #realestate #MillennialTalk

A2h. If buying home is a big stretch, consider renting a room to someone as a revenue source. #homebuyer #MillennialTalk

Q3. @EricDunstan I want to buy a home…now what? #MillennialTalk
A3a Get prequalified for a loan, understand how much of a house you can afford. #homebuyer #MillennialTalk

A3b Look at all the loan options; conventional/gov insured, fixed rate, adj rate, 30 yr or 15 yr. There are a ton of options. #MillennialTalk

A3c Sometimes seller financing is an option. The seller acts like the bank u make mo payments to them.#MillenialTalk

The thought of owning a home never crossed my mind until my early thirties. I remember a myriad of limiting thoughts crossing my mind including, “there is NO WAY I can afford a home,” or “I don’t have the time or the money to maintain a home” or “owning a home is something you do when you settle down…and renting is still cheaper.” Looking back on those thoughts I can’t help but laugh. Yes, those thoughts are all legit, but SO NOT true.

I was 31 when I seriously considered buying my first home. Up until that time I did what all of my other friends did…rent an apartment with roommates. At that time of my life, I was in my last quarter of my MBA program at Santa Clara University. I was going to school part time and working full time as to not take on giant school debt. “Who has the time or money to own a home? All I do is work and go to school at night,” I remember thinking.

A roommate, Greg, told me one night that he planned to buy a house and asked if I would be open to renting a room from him once he found a home. Hmmm….clever. Seeing him go through the home buying process opened my eyes to how that “trick” is done. Greg found a home after a few months search and I rented a room from him at a price equal to what I was paying for the apartment…and he got all the financial benefits. I quickly realized if Greg could do it, so can I.

The first step in buying a home is to get your financial house in order and determine when you are ready to buy a home. Yes, this can be tough given the lack of financial education people receive these days. Or, if you totally “Kanye” your finances buying too many Yeezy shirts. One of the best things I did was meet with a certified financial planner (CFP). Financial planners will help you obtain a clear snapshot of your current financial health and help you identify short-term and long-term goals…including buying a house. Planners will also provide you the tools to get there.

Ask a trusted friend or parent for a referral or there are options available online. Alexa von Tobel created LearnVest to help people get control of their money. Be financially fearless! The service and tools are all available online and certified financial planners are available to work with people one on one to achieve their dreams. I’ve met Alexa several times during my time with a financial technology startup. She is really great and has a passion to help others. Believe me, once you understand your financial strength, the path to affording a home becomes clear. I think many of you will find the path a lot less difficult than you think. I know I did.

A second step in understanding the affordability of a home is the cost of ownership. This is a BIG factor I find many people don’t quite think through clearly. Getting your financial house in order to buy a home is focused mostly on getting approved for a loan to buy a house. This second step is focused on what’s needed to keep and maintain a home once you buy it. So beyond the monthly mortgage payment, homeowners must consider costs of home insurance, taxes, utilities, homeowners association dues (if applicable) and more. These home ownership costs are in addition to the typical living expenses we all have including cable, phone, Internet site subscriptions, going out, etc.

So how is this done? Build a budget! Building a budget helps identify and prioritize monthly expenses within the context of your financial priority…in this case, home ownership. Yikes, many people quickly realize the need to say “no!” to a Tuesday trivia night at a local bar. I remember making the decision to NOT buy a BMW so I can afford a home. I will be writing more about budgeting in a future post…and will maybe throw in some trivia for those needing a fix.

A third step in understanding home affordability is changing the mindset that it’s what people do who want to settle down. Or that renting is still cheaper. I recently wrote a post for TV and radio talk show host, Chelsea Krost, about the benefits of buying versus renting so check that out as a resource.

The shift in mind-set is up to you and it’s hard to change people’s thinking without a catalyst. What shifted my mind into wanting to own a home was my room mate Greg. He bought a home and I rented a room from him. He used my rent money to pay down HIS mortgage and gave HIM great tax benefits. Greg got to experience the many financial benefits of owning a home…and I paid him to do it. That relationship changed my mindset. “I need to look into this!” I remember thinking.

Yes, home ownership is scary. The more you understand how it’s done and the many benefits received the less scary it is. I argue the more EXCITING it is. Home ownership is one of the many things that make America great. It’s your property. You can do what you want with it…within reason, of course. Do laundry at midnight. Fry fish and stink up the house. Netflix all night with the sound WAY up. If you do it in your own house, no one complains to the landlord. Better yet, NO BODY CARES! To me, that’s the true benefit of home ownership.

My goal is to share with others the great opportunities, benefits and risks of home ownership to empower them to make their own decisions for what works best.

Please feel free to Tweet me with questions about this post @ericdunstan.